And no, there is no way to bypass it and take a digital feed straight to an external DAC
There is one way to do this with an iPod, but it'll cost'ya a bit of coin. Using the MSB Link you can accomplish this for $2k. Utterly ridiculous, IMO when you think that $2k can buy you a laptop, an external drive and a USB/SPDIF converter. You can see further comments on the same subject on this thread
Marco